Don't let it get away!

It wasn't long ago that quarterly results for the big oil companies tended to resemble a flock of ducks, waddling along one after another, generally affected by the same external conditions and producing results that essentially were similar.

But things have changed. TakeChevron (NYSE: CVX) and ConocoPhillips (NYSE: COP) , for instance. The second- and third-largest of the major U.S. integrated oil companies behind the king of the beasts, ExxonMobil (NYSE: XOM) , is each being beset by a different set of challenges. As such, they clearly must be judged by individualized sets of criteria, which adds challenges for those of you attempting to get your arms comfortably around the industry.

A ConocoPhillips lead-offBeginning with Conoco, which led off reporting for the group last week, it appears that the company checked in with a stellar quarter, with net income of $3.39 billion, or $2.56 per share, compared with last year's $2.04, or $1.39 per share, for the comparable fourth quarter a year earlier. The difference was a whopping 66.1% on the net-income line. And even the company's adjusted earnings of $2.02 per share, while obviously a year-over-year slide, handily beat analysts' consensus expectations of $1.77 per share.

But if you look carefully at the details underlying the company's results, it immediately becomes clear that ConocoPhillips resembles a home that you might have caught on a cable housing network as it undergoes a major renovation. In Conoco's case, the company clearly got ahead of itself in the acquisition department a few years ago, and now management is in the last stages of righting things by downsizing, having sold off nearly $11 billion in assets during just the past two years. As such, a slug of that 66% earnings gain for the quarter resulted from $1.5 billion in gains on the sale of those assets, primarily pipelines.

Conversely, with fewer assets to work with, Conoco's production for the quarter slid by 13.3% year over year. Fortunately, that slide was at least partially offset by a 22.4% increase in the company's average crude price realizations, along with nearly a 5% improvement in the average natural gas prices it received. For the year, Conoco's production was down 8%.

Those thrilling days of yesteryearLooking ahead, with natural gas prices continuing to flag, ConocoPhillips is likely to follow suit withChesapeake Energy's (NYSE: CHK) announcement last week by curtailing a single-digit percentage of its gas production. In addition, by the time we talk about Conoco in the past tense next quarter, the company will probably have spun off its refining business to form a separate company, Phillips 66. Those of us who recall that moniker from days of yore won't be hard to convince that the more things change, the more they stay the same.

Chevron's differencesChevron, on the other hand, isn't facing major structural changes, but it is attempting to contend with other difficulties. For starters, its year-over-year financial results included earnings of $5.12 billion, or $2.58 per share, down from $5.3 billion, or $2.64 per share, in the final quarter of 2010. Per-share earnings for the most recent quarter missed Wall Street's expectations of $2.86 per share.

A portion of the company's earnings decline in the quarter was tied to a fall in production, which made up part of its full-year 3.3% decline in output from 2010. Nevertheless, investors with a taste for oil and gas shouldn't gloss over Chevron's having added oil-equivalent reserves of about 1.67 billion barrels, or almost triple its annual production. Reserve replacement ratios are key measures of an exploration and production company's success during any given year.

Looking at downstream results, Chevron was affected by tighter refining margins. Essentially, as with its peers, lower demand for refined products made it impossible to pass along higher raw-materials costs, such that the company's downstream results tumbled from earnings of $742 million a year ago to a $61 million loss in the most recent quarter.

In South America -- other than in Venezuela, of all places -- Chevron is beginning to appear snakebitten. For instance, an offshore leak in Brazil continues to have the company crosswise with local authorities. And beyond that, Chevron continues to contest a lawsuit by locals in Ecuador that relates to claims that Texaco, which worked in the country years ago and which Chevron bought in 2001, left behind environmental damage.

When asked about the Ecuador case during his post-release conference call, CEO John Watson responded: "I think it's generally acknowledged that this case is a product of fraud. This is a collaboration between corrupt plaintiff lawyers in the U.S. and a corrupt judiciary in Ecuador."

The net positives at ChevronDon't get the impression that the wheels are coming off at Chevron. That's hardly the case. In addition to its stellar reserve replacement results for 2011, the company has become the major player in Australia's thriving LNG action, and it's a way to avoid playing in Iraq or Russia, two countries that I believe are becoming more precarious for Western companies than generally is realized. At the same time, it's the only way to participate in upstream opportunities in Saudi Arabia. And -- believe it or not -- along with BP (NYSE: BP) , it's extremely active and successful in the Gulf of Mexico.

My inclination, given a world in which crude demand may already have slipped past supply, is to keep a close eye on both ConocoPhillips and Chevron, with a current nod to Chevron, since we don't yet know how Conoco's remodeling will turn out. You can do so most effectively by following the companies' links below, thereby adding them to your version of the Fool's My Watchlist.

If you're looking for more ideas, The Motley Fool has created a new special oil report titled "3 Stocks for $100 Oil," which you can download today, absolutely free. In this report, Fool analysts cover three outstanding oil companies. Get instant access to the names of the three oil stocks,for free.

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Natural gas finally got some good news last week. First, major producer, Chesapeake Energy (CHK) announced that it was cutting its natural gas production by 50%, taking some immediate pressure off the market. Sure, (CHK) is just one company, but others may follow suit.

Second, at the urging of my friend, Boone Pickens, Present Obama announced funding of some natural gas corridors in his State of the Union address. These are chains of natural gas stations placed every 100 miles stretching from east to west and north to south that would allow heavy trucks on transcontinental routes to refuel. This would provide the extra incentive for these 18 wheelers to convert from diesel fuel to CH4 at a nominal cost and put a major dent in our oil imports.

The news was enough to trigger a massive short covering rally in this most unloved of molecules. The spot market soared 25%, from $2.25 to $2.82 per MBTU’s, while the ETF (UNG) leapt from $5 to $6.

I am going to call the bluff of the market here and buy the United States Natural Gas Fund April, 2012 $6 puts at $0.65 or best. That way I can take advantage of the huge contango that exists between the spot and forward markets for natural gas futures contracts. To avoid actually drilling its own wells, the (UNG) buys forward contracts at huge premiums and holds them until they expire at spot. They then roll the cash forward into new contracts and repeat the process. It is one of the best wealth destruction machines I have ever seen and explains why (UNG) has, by far, outperformed natural gas on the downside. It is a great thing to be short.